NEW DELHI: IKF Finance, backed by Motilal Oswal Private Equity, has entered into a co-lending partnership with Bank of India, a public sector bank, to offer commercial vehicle loans.
Leveraging IKF’s three decades of strong lending experience, Bank of India seeks to strengthen its Micro, Small and Medium Enterprise (MSME) portfolio. According to IKF, the partnership with Bank of India is an important step that enhances the efficient sourcing and underwriting capabilities of the non-bank financial corporation (NBFC).
Under this lending partnership, IKF Finance, through its diverse network of branches in nine states, will originate and process loans to auto finance borrowers in accordance with credit parameters mutually agreed upon with the bank. The co-lending model was announced by the Reserve Bank of India (RBI) to increase the flow of credit to the unserved and underserved sector by utilizing NBFC’s agile coverage for the informal sector while leveraging the cost of bank capital.
Vasumathi Koganti, Managing Director of IKF Finance Ltd., said, “This fits well with IKF’s goal of becoming a one stop shop for all vehicle finance needs of the underserved. As we move on to more ₹10,000 crore assets under management (AUM) over the next few years, such arrangements will help us better channel credit and offer cost-effective vehicle financing solutions to various borrower segments.”
IKF Finance is a multi-product retail financier spanning vehicle finance and affordable housing with an AUM of over ₹2,000 crores. IKF offers loans for the purchase of commercial vehicles, cars, CUVs, three-wheelers, tractors and construction equipment, in addition to guaranteed loans to MSMEs.
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